The IT markets of the 10 States that joined the EU in 2004 are set to stay hot for the foreseeable future, and EU membership is playing a critical role. According to a new study by IDC, direct and indirect sources of funding will boost annual IT spending growth by more than 2.2 percentage points over the 10-year period 2004–2013. This amounts to an additional $27.6 billion that would otherwise have been unavailable for upgrading infrastructure, investing in software, and employing service providers.

“The impact of the increase will vary country by country given the diversity of the business environments, the state of local IT development, and the level of entrepreneurialism and FDI,” said Steven Frantzen, group VP of IDC CEMA and general manager for research, IDC EMEA. “To encourage IT uptake and general business development, one thing IT providers will need to do is navigate the processes by which direct funds are awarded and the various legislative and reform initiatives that often depend on an IT solution.”

Recent economic indicators provide strong evidence that EU membership has been good for the economic development of the 10 states that joined in 2004. According to Eurostat, the new members, with the exception of Malta, had GDP growth rates well above the EU 15 average of 1.5 per cent in 2005 and 2.6 per cent last year. Both Estonia and Latvia have seen their GDP growth soar past 10 per cent, putting them among the fastest-growing economies in the world.

But membership has been even better for the IT markets. While consumers use their increased spending power to buy or upgrade IT, businesses are under additional pressure to adopt the technology and transparency standards of international players to deal with the increasingly competitive environment.